2.1 Log Supply from Estate Crops and Plantations
2.2 Current Sources of Supply
2.3 Incremental Sources of Supply
The log supply of the study region is perceived to largely determine the development of the forest products manufacturing industry and the evolution of forest products trade. The logs pertinent to this study are sawlogs and veneer logs utilized in the study area; fibre logs, which are appropriate for manufacturing pulp or reconstituted boards and panels, fall outside this study, except where the products manufactured from them may substitute for sawnwood or plywood panels.
This section identifies the various log supplies likely to be available to the industry of the region during the 15-year period covered by this study. The relevant characteristics of each supply are described. For each supply region, a "base case" supply schedule is provided to identify potential rates of harvest during the study period.
For this study, log sources include the natural forests of the region, estate crops, plantations, and imports, and are characterized as current or incremental sources of supply.
Supply from the natural forests of the region
The largest source of sawlogs and veneer logs in the study area is the hardwood trees of the natural forest.
Supply from estate crops, plantations, and import
In addition to the supply from the natural forest, sawlogs and veneer logs are recovered from the rotation of estate crops such as plantations of rubber trees or coconut; produced from industrial plantations (e.g., teak or fast-growing species); or imported (conifer logs) to the study area. All of these sources of supply are utilized currently, to some extent, in the study region.
Current sources of supply
Current sources of supply are sources that were producing sawlogs or veneer logs in 1995, the base year of the analyses supporting this study.
Incremental supply
Incremental sources of supply are sources that are not currently producing a significant volume of logs, but may do so under favourable economic conditions. This study considers four incremental supplies:
· logs from improved utilization of the natural forest (i.e., smaller logs or logs obtained from lesser-utilized species)· logs from environmentally sensitive terrain using low-impact or aerial harvesting systems
· logs from the improved recovery of rubberwood
· increased exports of conifer logs into the region
Rubberwood is recovered as a by-product from rubber estate replacement programs and is now a significant component of the tropical timber trade. However, it is not fully exploited as a log supply for manufacturing wood products.
Utility
Rubberwood can be used to manufacture furniture, plywood, glue-lam joints and building components, particle board, block board, wood cement board, and MDF. It can also be pulped, although its other uses are more profitable.
Rubberwood can be used as substitute (principally for appearance values) for several species of the study region: ramin, meranti, sersaya, merbau, kapur, tangile, and teak. These species account for more than 75% of the volume of the region's timber trade.
Rubberwood production from each supply region (Table 1) is determined by the extent of the rubber plantation estate, the estate ownership pattern, the available infrastructure, and the scarcity of industrial wood.
Table 1 - Potential and reported supply of rubberwood
|
|
Rubber estate area ('000 ha) |
Recovery of total potential sawlogs and veneer (%) |
Sawlog and veneer log production 1991 ('000 m3) |
|
Indonesia |
3,043 |
45 |
270 |
|
Malaysia |
1,835 |
84 |
1,350 |
|
Thailand |
1,779 |
80 |
1,638 |
|
China |
467 |
85 |
308 |
|
Vietnam |
197 |
95 |
150 |
Source: ITC 1993
Recovery of logs
Although Indonesia supports the largest rubber estate, the rubber industry is concentrated in smallholder estates with poor infrastructure and a relatively low level of organization and participation in government replanting programs. Consequently, only 45% of Indonesia's potential production of rubberwood sawlogs and veneer logs is recovered. Malaysia and Thailand are also dominated by smallholders, but are better organized and have a developed infrastructure; hence, these countries recover 84% and 80%, respectively. In China and Vietnam, where the general level of development is lower than in Malaysia and Thailand, recovery is 85% and 95%, respectively, probably due to the scarcity of industrial wood.
Delivered wood cost
As rubberwood need not bear its full cost of production (it is a by-product of agricultural production) delivered wood costs are relatively low. However, sawnwood recovery is also low due to the small and irregular size of most rubberwood logs (Table 2).
Table 2 - Rubberwood supply cost and sawnwood recovery
|
|
Delivered log cost ($/m3) |
Sawnwood recovery (%) |
|
Indonesia |
15 |
15 |
|
Malaysia |
23 |
25 |
|
Thailand |
25 |
40 |
|
China |
45 |
45 |
|
Vietnam |
na |
30 |
Source: ITC 1993
Supply assumptions
Rubberwood is part of the current supply of many of the supply regions examined in the study and is included in the base case supply schedule. However, projected improvements in the efficiency of rubberwood recovery are considered incremental and are represented as a separate incremental supply.
Although coconut wood is not generally part of the tropical timber trade, it is an important alternative source of local supply for countries with a significant coconut resource but limited current supplies of roundwood. Like rubberwood, coconut wood is a by-product of coconut production. Normally, coconut trees are sterile after 60-70 years and are then replaced.
Utility
Coconut wood differs structurally from tropical hardwoods and presents unique manufacturing difficulties, but it can be used for structural, joinery, furniture, and roundwood applications.
Supply assumptions
Significant volumes of coconut wood have been utilized for manufacturing traditional forest products in several Asia-Pacific countries including China and Indonesia, but coconut wood has been and will continue to be most utilized in the Philippines. The present coconut plantation estate in the Philippines is just over 3.1 million hectares (ha) and supports an average of 93 trees/ha. Typically at replacement, each mature tree will contain about 1 cubic metre (m3) of utilizable wood and sawnwood recovery rates of about 40% are possible.
Indonesia is the other Asia-Pacific country with a major coconut plantation estate, reported to be 3.3 million ha. Thailand also has a limited resource of 0.45 million ha.
As coconut wood contributes little to sawlog and veneer log supply, it is not considered explicitly in this study, but is incorporated into the supply estimates for the Philippines and Indonesia.
The wood from palm-oil trunks differs significantly from that of the coconut palm. Due to extensive resources of palm-oil in the region, the utilization of palm-oil fibre is being investigated.
Sawlogs and veneer logs from plantations are a significant source of industrial wood in the Asia-Pacific region.
Supply assumptions
About 1.75 million ha of net industrial plantation existed in 1990 (FAO 1990). ITTO (1995) estimated that additional planting since 1990 had increased the total net area to at least 2.0 million ha. 1 Indonesia had the largest share of the plantation estate (50%), followed by Vietnam (21%), Thailand (13%), Myanmar (8%), Malaysia (4%), and the Philippines (2%).
1 These net plantation area estimates were derived by factoring the reported plantation areas given in the FAO Assessment by the reported average 61 % survival rate developed in the companion FAO study on plantations.
A considerable proportion of the industrial plantation estate has been established for fibre products such as pulp and paper, although it is also suitable for wood-based panels. Also, encroachment on existing plantations is a serious problem in many countries.
This study assumes that significant volumes of sawlogs and veneer logs will be available only from Indonesia, with lesser volumes from the Philippines, before 2010; these volumes are considered "current sources" and are included in the base case supply for the appropriate supply regions.
2.2.1 Indochina - Cambodia, Laos, and Vietnam
2.2.2 Indonesia
2.2.3 Peninsular Malaysia
2.2.4 Sabah
2.2.5 Sarawak
2.2.6 Myanmar
2.2.7 Papua New Guinea
2.2.8 Philippines
2.2.9 Solomon Islands
2.2.10 Thailand
For each of the producer regions, a base case supply schedule of logs from current sources has been identified.
Assumptions
Based on the assumptions of 17 million ha of productive forest land and an annual sustainable production rate of 1 m3/ha, ITTO (1995) estimated a sustainable rate of harvest of 17 million m3 annually for the region with an additional 9 million m3 potentially available from virgin broad-leaved forest, principally in Cambodia. The ITTO study indicated that although the rate of harvest in Cambodia and Laos has the potential to increase considerably, current forest management, lack of infrastructure, and the lack of institutional capacity to expand this infrastructure will severely constrain this expanded harvest. The study also questioned whether the present rates of harvest in Vietnam are sustainable.
Current sources
In addition to the hardwood resource, the current sources of supply for the region include minor volumes of logs from industrial plantations and rubberwood recovery.
Vietnam base case supply
This study assumes that the rate of harvest for Vietnam will remain at the harvest level experienced in the five-year period from 1988 to 1992; a sawlog and veneer log harvest of about 3.0 million m3 will be available from 1995 to 2010.
Cambodia and Laos base case supply
This study assumes that the rate of harvest from Laos and Cambodia will increase uniformly by 75% from 1995 to 2010. For Cambodia, the harvest is forecast to increase from 380,000 m3 in 1995 to 690,000 m3 in 2010; the harvest in Laos is forecast to rise from 440,000 m3 to 780,000 m3 over the same period.
For Indochina in total, the harvest rate would increase approximately 20% to just over 4.4 million m3 in 2010.
Assumptions
Indonesia's forest lands are classified as production forest (42%), conversion forest (19%), or conservation and protection forest (39%). Conversion forests grow on lands identified for eventual conversion to higher use (usually agriculture). In most regions of Indonesia, conversion forest clearing will continue well into the next century.
An analysis of long-term timber supply forecasts a harvest of 33.7 million m3 in 1995 dropping only slightly to 32.8 million m3 in 2010 (FAO and Ministry of Forests of Indonesia 1990). The supply from the natural production forest trends down from 21.6 million m3 in 1992 to 20.2 million m3 in 2010; supply from clearing the conversion forest will decline from 10.5 million m3 in 1992 to 3.6 million m3 in 2010 (and cease altogether around 2025). Note that the cessation of conversion operations is predicted by the government and may not, in fact, occur in the time-frame given.
Current sources
In addition to hardwood log supply from the production and conversion forests, the current timber supply of Indonesia includes sawlogs and peeler logs produced from plantations, recovered rubberwood, and logs produced by rural farms and gardens.
Base case supply
This study assumes that supply will decline from the reported level of 34.5 million m3 in 1995 (ITTO 1996b) to 33.8 million m3 in 2010.
Assumptions
Malaysia's policy is to limit the harvest from the production component of the permanent forest estate to 3.0 million m3 annually; clearing of the conversion forest is largely complete.
Current sources
Current supply in Peninsular Malaysia includes sawlogs and veneer logs from plantations and rubberwood. ITTO (1993) estimated a long-term sustainable harvest of 3.87 million m3 from the production forest with a short-term forecast of 8.6 million m3 in 1995 declining to 6.4 million m3 in 2010. The log supply in 2010 is forecast to consist of 3 million m3 of logs from the natural forest, 2.3 million m3 from rubberwood, and 0.9 million m3 from plantations.
Base case supply
This study assumes an available harvest of 8.6 million m3 in 1995 declining to 5.2 million m3 in 2010. (The 1993 ITTO study included 3.4 million m3 of fibre logs in its forecast for 2010.)
Assumptions
Based on a review of the available information, ITTO (1993) predicted that harvesting from Sabah's virgin forests (production forest and conversion forest) will likely end by 1998 and that the better selectively logged stands could sustain a cut of 5.0 million m3 until 2003; logging the average- and lower-volume forests could sustain the cut through 2010. However, this level of supply is unsustainable under current management practices; the long-term sustainable supply was estimated at 1.97 million m3.
Current sources
Sabah's current supply of sawlogs and veneer logs is obtained from the natural forest and from plantations of fast-growing species.
Base case supply
This study assumes an available harvest of 5.3 million m3 in 1995, declining to 4.9 million m3 in 2010.
Assumptions
ITTO (1993) determined that, from 1992 to 2003, a harvest of 9.2 million m3 from the permanent forest estate and 7.4 million m3 from the clearing of conversion forest should be decreased gradually to 6.3 million m3 and 7.3 million m3, respectively. Harvesting from the conversion forest would then decrease to 3.1 million m3 from 2004 to 2010.
ITTO (1993) noted that this harvest schedule is unsustainable in the long term, and that under current management practices, the long-term sustainable supply was only 6.5 million m3. However, a subsequent ITTO mission to Sarawak found the sustainable yield level of the permanent forest estate to be 9.2 million m3.
Current sources
The current timber supply of Sarawak is obtained entirely from the production forest in the permanent forest estate or from the clearing of conversion forest.
Base case supply
This study assumes that the supply of sawlogs and veneer logs from current sources (production and conversion forests) will decline from 12.3 million m3 in 1995 to 8.8 million m3 in 2010.
Assumptions
The total productive forest area of Myanmar is 23 million ha. An annual growth rate of 1 m3/ha (the regional sustainable average AAC) would produce an annual harvest of over 23 million m3. However, any expansion of the harvest will require corresponding improvements in infrastructure.
Current sources
The current log supply of Myanmar includes industrial plantations (mostly teak) and recovered rubberwood.
Base case supply
This study assumes that the present rate of sawlogs and veneer logs harvested will increase uniformly from the reported level for 1995 (ITTO 1996b) of 1.1 million m3 in 1996 to 8.4 million m3 by 2010.
Assumptions
Papua New Guinea has one of the largest and most valuable blocks of virgin forests remaining in Southeast Asia and has significant potential for expanding the harvest. The forest resource is as yet relatively untouched, and the demands for local consumption are low. About 90% of the average log harvest is exported as logs; 3.0 million m3 was exported in 1995 (ITTO 1996b).
Of the total forest land area of 36.4 million ha, approximately 15 million ha Is considered operable at this time. The remainder is inaccessible for economic or environmental reasons. ITTO (1993) estimated an annual sustainable harvest of 15 million m3 in the long term, based on a conservative estimate of annual growth on the operable area of 1 m3/ha. Institutional constraints including forest land tenure and industrial organization (discussed in the section of this report Factors Influencing the Pattern of Industrial Development and Trade) will slow development of this resource.
Current sources
The current source of supply of sawlogs and veneer logs III Papua New Guinea is the natural hardwood forest.
Base case supply
This study assumes that the supply of sawlogs and veneer logs will remain constant at the 1995 reported level of 3.0 million m3 (ITTO 1996b) from 1995 to 2010.
Assumptions
The Luzon pine forests produce approximately 150,000 m3 of sawlogs annually. The annual production is 1 million m3 from the residual Dipterocarp forest and approximately 150,000 m3 of sawlogs from the Luzon pine forests. Under current practices, the only improvement forecast for Philippine supply over the planning period is an increase in sawlog production from existing plantations.
ITTO (1995) estimated the long-term sustained yield from current sources to be 2.5 million m3, assuming that the residual Dipterocarp forest could sustain a long-term annual harvest of 1.1 m3/ha and sawlog supply from the plantations could be expanded.
Current sources
Current sources of log supply in the Philippines are the previously logged Dipterocarp forest, pine forests, plantations of fast-growing hardwoods, and the rotation of estate crops (rubberwood and coconut).
Base case supply
This study assumes that the harvest will increase from its reported level in 1995 of 614,000 m3 to 1.65 million m3 in 2010, based on an increase in sawlog production from existing plantations.
Assumptions
Based on preliminary results from a new national forest inventory, ITTO (1995) estimated that the Solomon Islands has 860,000 ha of productive forest land and an industrial plantation estate of about 25,000 ha. Estimated harvestable volume from the natural productive forest is about 17 m3/ha, which is less than 30% of the estimated total volume of about 60 m3/ha. A cutting cycle of 35-40 years was also assumed.
ITTO (1995) also estimated the sustainable harvest to be 325,000 m3 which is very close to the reported production levels of recent years (330,000 m3 for 1990-1994) (FAO 1996). Given the probability of strong future log export markets, the actual harvest could be higher and closer to the levels reached in the early 1980s (435,000 m3).
Base case supply
For this study, a compromise annual harvest level of 400,000 m3 was assumed for the 1996-2010 period.
Assumptions
ITTO (1995) estimated a long-term sustained yield of 7.5 million m3 based on achieving annual growth rates of 1.5 m3/ha on 5 million ha of natural production forest. However, in 1995, the reported production from the natural forest was only 30,000 m3 (ITTO 1996b), while ITC (1993) forecast the production of sawlogs and veneer logs from rubberwood to be 1.64 million m3.
Current sources
Current sources of supply of sawlogs and veneer logs in Thailand include the natural forest, industrial plantations (mainly teak and Eucalyptus), farm woodlots, and log recovery from rubber plantations.
Base case supply
This study assumes that harvests from current sources will remain near their reported rate in 1995 of 1.67 million m3 until 2010.
2.3.1 Improved Utilization
2.3.2 Low-impact Harvesting Technology
2.3.3 Conifer Logs
Incremental sources of supply are sources that are not currently producing a significant volume of logs, but may do so under favourable economic conditions.
Considerable potential exists for increasing the wood supply in the Asia-Pacific region through better utilization of forest residuals and of commercially less-accepted species. Recent forest utilization studies by ITTO and FAO indicate that almost 50% of the volume in felled trees is not extracted and utilized, and that only about 26% of the standing volume in harvest areas was felled.
Supply assumption
ITTO (1995) estimated that a 25-50% increase in supply would be physically possible across the region. Note that much of this additional supply will be unsuitable for manufacturing traditional solid-wood products such as lumber and plywood. Based on studies and work in other regions, the incremental cost could be as much as 50% more than present delivered wood costs, depending on the proportion of residuals utilized.
Incremental supply
This study assumes that improving utilization will create an incremental supply of sawlogs and veneer logs, beginning in 1995, that will peak at 25% of current supply by 2010. The delivered wood cost for the incremental supply is estimated to be 25% above the cost of current supply.
It was further assumed that an incremental supply of fibre logs equivalent to 25% of the current supply could be developed at an incremental cost of 50%. These fibre logs would be suitable for the manufacture of wood-based panels or other fibre-based products. As with the incremental sawlog and veneer log supply, this supply is forecast to become available gradually and to be fully developed by 2010.
New harvesting technology, including aerial (helicopter and various skyline cable systems) and high flotation/low ground pressure systems, allows the removal of timber from steep and environmentally sensitive sites - which are now excluded from commercial timber production. These systems will also decrease the environmental impact on less sensitive sites by reducing soil compaction and damage to the residual stand, and the density of truck roads.
Delivered wood costs
The total delivered wood costs associated with these systems may be 25-50% more than present methods; require a more highly trained work force; are capital intensive; and may be limited in their application by weather and ground profile.
Indonesia, Malaysia, and Papua New Guinea have significant areas of forest on sensitive sites which would be suitable for application of this new technology. ITTO (1995) estimated that Indonesia and Papua New Guinea could each sustain a harvest of 20 million m3 from these sensitive areas.
Incremental supply
This study assumes a potential increment of sawlog and veneer log supply of 5 million m3 for Indonesia and Papua New Guinea, and 2.5 million m3 for Malaysia, at an average harvesting cost 50% above the cost of current log sources. This supply is forecast to become available gradually and to be fully developed by 2010.
Russia
Traditionally, the flow of logs from Russia to the study area has been primarily to Japan, averaging 4.6 million m3 (all grades) between 1991 and 1994, plus small volumes to the Republic of Korea. Japan and the Republic of Korea are showing increasing use of Russian logs for manufacturing plywood.
This study assumes that the supply of conifer sawlogs and veneer logs from Russia will increase from 1.0 million m3 in 1995 to 5.0 million m3 in 2010.
Australia, New Zealand and Chile
In recent years, New Zealand, Chile, and, to a lesser extent, Australia have supplied conifer logs - which are employed as substitutes for tropical timber - into the study region. This supply is expected to increase steadily through the planning horizon of this study as most of it originates from plantations (especially New Zealand and Chile) that are managed for solid-wood products on 20-30 year rotations and, hence, already exist.
For the 1990-1992 period, average conifer log export values were $56/m3 for New Zealand and $48/m3 for Chile.
ITTO (1995) estimated that supply in excess of domestic consumption would rise from 20 million m3 in 1995 to 35 million m3 in 2010 (New Zealand and Chile). The same study found that Australia is unlikely to contribute additional conifer logs suitable for sawing or peeling (Table 3).
Table 3 - Incremental supply of conifer logs available to the Asia-Pacific region
|
Volume ('000,000 m3) |
1995 |
2000 |
2005 |
2010 |
|
Australia |
0 |
0 |
0 |
0 |
|
New Zealand |
8.9 |
11.7 |
17.0 |
17.7 |
|
Chile |
11.2 |
16.2 |
16.9 |
17.1 |
|
Total |
20.1 |
27.9 |
33.9 |
34.8 |
Source: ITTO 1995
This study assumes that the incremental supply of conifer logs available to the study region will rise from 1.75 million m3 in 1995 to 7.0 million m3 in 2010.
